The Slovenia Times

Janša: Slovenia Does Not Need International Aid


"It is our assessment that based on the already passed measures, in particular the act on the balancing of public finances, Slovenia as a state is at this point in no danger of asking for help," Janša stressed.

The only issue still left unsolved is the banking sector, according to the prime minister. However, since due diligence of Slovenian banks is still under way, it is too early to make any kind of assessments as regards to the banks' need for financial aid.

He asserted that the government was doing all it can to avoid asking for help from EU rescue funds, which will become more flexible in line with last night's agreement of EU leaders.

There is probably no member of the eurozone, and Slovenia is no exception here, that would look forward to ever having to use these mechanisms although they will become more flexible, Janša said.

He added that the two-day EU summit exceeded expectations and that all short- and long-term decisions made were "of extreme importance to Slovenia". The summit was one of the "ground breaking meetings" both in terms of decisions made at the EU level and those at the eurozone level, he said.

He moreover expressed hope that financial markets would respond positively to the meeting.

The key novelty in the functioning of EU stability mechanisms is that both the temporary European Financial Stability Facility (EFSF) and the permanent European Stability Mechanism (ESM) will become more flexible, Janša said, adding that it would be possible to recapitalize banks directly from the ESM, provided that central oversight is boosted, which he deems necessary.

Direct recapitalisation of banks from the ESM will enable problems of financial institutions or lack of liquidity to be solved in a way that will not directly burden the country's public finances, the PM said.

"This is a big change from how the mechanisms have been used so far, but this flexibility is not without limits. The limits are the funds available and the rules enabling the use of state aid."

A general condition for a country to be able to count on this kind of aid is to be consistent in following EU rules related to the stability pact and other rules and recommendations by the European Commission, Janša said.

Contrary to what some papers write, Germany agreed at the summit to what it has been claiming all along - that more flexibility is possible only if oversight is boosted, he added.

But according to Janša, the key document endorsed at the summit is the pact for growth and employment. He labelled it a "strategic document that responds to the challenges the EU will face in the coming years".

The pact is very important for Slovenia for two reasons, Janša believes. Firstly, because it will create a better and more competitive business environment in the EU in the coming years, opening more possibilities for Slovenia's export-oriented economy.

And secondly because it envisages the setting up of certain additional financial sources which Slovenia will be able to directly access to compensate for its own "investment drought".

One of the measures to encourage growth is a capital increase of the European Investment Bank in the amount of EUR 10bn to boost its loan capability by EUR 60bn. Slovenia is to contribute EUR 24m to the recapitalisation.

Janša said the figure is not final yet, but this "will be a relatively low input considering the options it opens, which is not negligible in the situation we are in".

As regards the talks on the financial framework for the 2014-2020 period, Janša said Slovenia's main goal was to preserve the cohesion funds as an important source of investments and therefore also an engine of growth in the EU, which was according to him the position most members advocated at Thursday's meeting.


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